State Income Tax Rates 2026: All 50 States Compared

The 2026 State Income Tax Landscape at a Glance

According to the Tax Foundation's 2026 State Tax Data report, 41 states levy a broad-based individual income tax. Of those, 13 use flat-rate structures; the rest use graduated brackets where the rate increases with income. The trend toward flat taxes is accelerating: multiple states have recently moved from graduated to flat systems (including Georgia, which adopted a flat 5.19% rate effective July 1, 2025), and a handful of flat-tax states are on a legislatively scheduled glide path toward zero.

Eight states implemented income tax rate reductions on January 1, 2026, according to the Tax Foundation's 2026 State Tax Changes report. This reflects a broader competitive pressure: states that border no-income-tax or low-income-tax states face ongoing pressure to reduce rates to retain high-income residents and mobile businesses. The Tax Foundation ranks states on an overall "State Business Tax Climate Index" that weights income taxes heavily, but also accounts for sales tax, property tax, and unemployment insurance taxes.

States With No Income Tax (9 States)

The nine states that levy no income tax in 2026 are: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

New Hampshire completed its exit from income taxation effective January 1, 2025. The state had taxed dividend and interest income for decades; its final elimination brought it fully into the no-income-tax club. Tennessee had already completed a similar transition in 2021, eliminating its "Hall Tax" on investment income.

Two important caveats about "no income tax" states:

• Washington state levies a 7% capital gains excise tax on long-term capital gains above $250,000 per year (confirmed constitutional by the Washington Supreme Court in 2023). It is technically not an "income tax" under the state's constitution, but it functions as one for high earners with investment income.
• New Hampshire has among the highest property taxes in the nation — the 3rd highest effective property tax rate per the Tax Foundation — which is partly how the state funds schools and services without income or sales tax revenue.

For a comprehensive look at these states and their total tax picture, see our guide to states with no income tax.

High-Tax States: Top Marginal Rates in 2026

The states with the highest top marginal income tax rates in 2026, per the Tax Foundation:

A critical point that media coverage routinely misses: top marginal rates apply only to the income above the threshold — not to all income. A California resident earning $150,000 pays the 13.3% rate on zero dollars; their income falls in lower brackets. The effective California income tax rate for someone earning $150,000 is roughly 7–8%, not 13.3%. The income tax calculator can show you the actual marginal vs. effective rate breakdown for any income level.

Flat-Rate Income Tax States in 2026

Thirteen states use a single flat rate on all taxable income. Proponents argue flat taxes are simpler and more growth-friendly (they don't create disincentives at specific income thresholds). Critics argue they are regressive — a flat 5% hits a $30,000 earner proportionally harder than a $500,000 earner. Here are the 2026 flat rates:

Ohio's change is the most structurally significant of 2026. The state moved from a graduated system with multiple brackets to a simple 2.75% flat rate on all income above $26,050 (income below that threshold remains untaxed). This makes Ohio one of the most competitive flat-rate states in the Midwest.

Massachusetts is technically flat (5.0%) but added a 4% millionaire surcharge in 2023 on income over $1 million — creating an effective top rate of 9.0% for the highest earners. This brings Massachusetts closer to New York and California for top earners than the "flat 5%" headline suggests.

The 8 States That Cut Income Tax Rates in 2026

Eight states implemented individual income tax rate reductions effective January 1, 2026, according to the Tax Foundation's 2026 State Tax Changes analysis. This is the most notable legislative development in state income taxation this year:

Mississippi's long-term trajectory is the most dramatic: the state passed legislation targeting a complete elimination of its income tax by 2029. If achieved, Mississippi would join the nine no-income-tax states, the first Southern state with a significant agricultural economy to make that transition in the modern era.

Complete 50-State Income Tax Reference Table

The table below shows top marginal rates for single filers in each state. For graduated states, the bottom bracket rate is also shown. Check your state's revenue department for complete bracket tables, as thresholds vary by filing status (single vs. married filing jointly).

Local Income Taxes: The Hidden Layer

State income tax rates are only half the picture. Many states allow cities and counties to impose their own income taxes, which can add materially to the total burden — and these local rates rarely get mentioned in "state income tax" comparisons.

Notable examples:

• New York City: NYC residents pay an additional 3.876% city income tax on top of New York State's rate, bringing the combined city + state + federal marginal rate to among the highest of any U.S. city. A high earner in NYC can face a combined federal, state, and city marginal rate exceeding 50%.
• Maryland: All counties and Baltimore City impose a local income tax between 2.25% and 3.2%. Maryland residents should always add the local rate to the state rate — the real state + local top rate for many Maryland residents is approximately 9%.
• Pennsylvania cities: Philadelphia imposes a 3.75% wage tax on residents (3.44% for non-residents working in the city). Many other Pennsylvania municipalities have their own earned income taxes under the Local Tax Enabling Act, typically 1–2%.
• Ohio municipalities: Despite Ohio's flat 2.75% state rate, cities like Columbus (2.5%), Cleveland (2.5%), and Cincinnati (1.8%) layer on substantial local income taxes.
• Indiana local taxes: Each county has its own county income tax rate (CAGIT/COIT), ranging from 0.5% to over 3%, collected on top of the 3.05% state flat rate.

This local tax layer is why Pennsylvania's 3.07% flat state rate doesn't tell the whole story for a Philadelphia resident, and why Ohio's new 2.75% flat rate doesn't mean Columbus workers are paying 2.75%. Always calculate city and county taxes when evaluating a state's true income tax burden. You can compare your situation with our state tax comparison guide.

The Remote Work State Tax Problem

Remote work has created significant complexity in state income taxation. In theory, if you live in Florida and work remotely for a New York employer, you owe Florida income tax (zero) and no New York income tax — because you didn't perform the work in New York. In practice, New York aggressively applies the "convenience of the employer" rule: if you work remotely from outside New York for your own convenience (not because the employer required it), New York treats your remote wages as New York-source income.

Several states — including Connecticut, Delaware, Pennsylvania, Nebraska, and Arkansas — apply similar convenience rules. Others, like California, apply market-based sourcing that can require non-residents to apportion income to California. The result: a remote worker who lives in a no-income-tax state may still owe income tax to their employer's state, depending on the rules of that state.

For deeper analysis of this issue, see our guide to remote work state income taxes.

Relocation Savings: Does Moving to a Low-Tax State Actually Pay Off?

The income tax savings from relocating can be substantial for high earners — but the calculation is rarely as simple as multiplying your income by the tax rate difference. Consider a specific scenario: a married couple earning $500,000 combined, currently living in California, considering a move to Texas.

California income tax at $500,000 (married filing jointly): approximately $38,000–$43,000 annually, depending on deductions and specific income type. Texas income tax: $0. That's a potential annual saving of $38,000–$43,000.

But the offset calculation matters:

• Texas property tax rates average 1.74% effective rate per the Tax Foundation — among the highest in the nation. California's average effective property tax rate is 0.71%, constrained by Prop 13. On a $1.5 million home, the difference is roughly $15,000+ per year in additional property tax in Texas.
• Texas has no state income tax but has one of the highest combined state + local sales tax rates, averaging 8.19% per the Tax Foundation.
• California's Franchise Tax Board actively audits high earners who claim to have left the state. Establishing non-California domicile requires demonstrating you have genuinely changed your permanent home — updating voter registration, driver's license, professional licenses, and spending fewer than 546 days in California over any 24-month period.

For most high-income households, the income tax savings of moving to a no-income-tax state are real and substantial after accounting for offsets. For lower-income households, the offset from higher property and sales taxes can neutralize much of the income tax saving.

State Tax Treatment of Common Income Types

Not all income is treated the same way by every state. Several important variations:

Social Security Benefits

The federal government taxes up to 85% of Social Security benefits for higher-income recipients. Most states do not tax Social Security at all. In 2026, the states that do tax Social Security to any degree include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia — though several provide significant exemptions for lower- and middle-income recipients.

Pension and Retirement Account Distributions

State treatment of IRA and 401(k) distributions varies widely. Illinois exempts all retirement income. Pennsylvania exempts distributions from IRAs and 401(k)s for taxpayers age 60 and older. New York excludes up to $20,000 of pension income for those 59½ and older. Michigan and Alabama provide generous pension exclusions. Other states, like California, fully tax retirement distributions at ordinary income rates.

Capital Gains

Most states tax capital gains as ordinary income — the same rate as wages. California taxes capital gains at its regular income tax rates (up to 13.3%), one reason high-earner investors face intense pressure to establish non-California domicile before selling appreciated assets. Arizona, Colorado, and a few others provide a small capital gains preference. For more detail, see our capital gains tax guide.

Frequently Asked Questions